Global Trade Imbalances: Actual Problems, Unlikely Solutions

There’s certainly no economic reason why every national economy should expect to have a balance between its exports and imports. But it’s also true that sustained and large trade imbalances have sometimes been a forerunner of economic problems, and often been a forerunner of political problems. It’s also true that global trade imbalances have been higher in the last 15 years or so than in the pre-2000 period. Here’s a snapshot of global trade balances over time from a recent IMF report, “Understanding Global Imbalances” (April 6, 2026). The not-easy-to-read bars in the figure show trade surpluses and deficits for large economies and also for other advanced economies (AE) and emerging market and developing economies (EMDE). For present purposes, one key takeaway is that the dark blue US bar represents a large part of the global trade deficits while the red China bar represents a large part of global trade surpluses (especially in the decade from about 2000-2010). Of course, a trade…